Prediction 1: Motorola's handset division will cease to be - 2009 Predictions

The company recently said it would implement a series of cost-cutting measures meant to stop the bleeding, but the bleeding continues and we expect Motorola will shutter the handset division. The company's debt was recently downgraded to junk status, meaning almost no one will be willing to loan it any money for future investments because its debt is essentially worthless. It lost $397 million in the third quarter of 2008--there are only so many quarters that can happen before a company goes bust.

Motorola has decided not to spin off the handset division, and instead to place most of its chips on Android and Windows Mobile-based phones, but has said an Android phone won't be out on the market until late 2009. If LG, Samsung and Sony Ericsson beat Motorola to the punch on that front, as they likely will, Motorola's last-best-chance at reviving itself will come at the tail-end of the Android march in the United States. We think the odds are stacked too high against Motorola and that its handset division will meet its demise.   

 

Prediction 1: Motorola's handset division will cease to be - 2009 Predictions
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